Living beyond $2 a day: How Indonesia has progressed

Arief Yusuf and Irlan Rum

No 201313, Working Papers in Economics and Development Studies (WoPEDS) from Department of Economics, Padjadjaran University

Abstract: Using a long series of household level survey data and more information on regional variation in the poor's living cost and inflation, we estimated the proportion of people living below 2005 PPP $2 a day. We found that for the period of 1990 to 2012, the $2 poverty incidence has been declining at an average rate of 2.2% per year leaving only 36.5% in 2012. The rate of the decline in the last ten years (or reformasi era, 2002-2012) has been faster (2.9% a year) than during the pre-reformasi era or the period of 1990-1996 (1.4% a year). This is in contrast to a rather slow rate of the decline in the poverty incidence with national poverty line during the reformasi era which was only 0.65% a year. We also found thatthe $2 poverty has been more concentrated among informal labor and agricultural workers. The difference between $2 poverty incidence in formal and informal labor was larger during the reformasiera, a sign that the informal labor has been rather left behind. During the reformasi era, the economic growth was a lot more income-inequalizing and a lot less pro-poor relative to growth during the period before the reformasiera. This applies to both the poor defined as those living below national poverty line or those living below $2 a day.

Keywords: poverty; $2 per day; Indonesia (search for similar items in EconPapers)
JEL-codes: J21 (search for similar items in EconPapers)
Pages: 20 pages
Date: 2013-07, Revised 2013-07
New Economics Papers: this item is included in nep-cwa, nep-dev, nep-iue and nep-sea
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Working Paper: Living beyond $2 a day: How Indonesia has progressed (2016)
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